Do you let sims with common ancestors that the game no longer considers related be romantic?

As in real life, I don't think second cousins is a problem. Not that I know any of my second cousins since I was raised in Australia by parents from different countries :D I think "Ew" is a tad extreme in the options.

I keep my populations small in generational saves, allowing families (except the active household) to only have two children. If I didn't allow second cousin relationships I would have to constantly introduce new "blood" which would defeat my efforts at keeping the population small.